Exxon Mobil reports record profits

Exxon Mobil today reported record profits of $10.7bn for the fourth quarter as the world's largest oil company cashed in on high energy prices.

The result surpassed Exxon's previous record of $9.9bn (£5.6bn) in the 2005 third quarter. Oil companies made big profits last year as prices surged to record highs, driven by a combination of factors.

Crude oil prices rose about 40% last year, hitting a peak of $70 a barrel, driven by strong demand in Asia, particularly China and after hurricanes Katrina and Rita shut down most wells in the Gulf of Mexico, the largest US production source.

Tensions in oil-producing countries such as Iran and Nigeria also helped to keep prices at lofty levels. Exxon's fourth-quarter revenue jumped to $99.6bn from $83.3bn a year earlier but fell short of analysts' average forecast of $101.2bn.

Exxon is the last of the major US oil producers to report fourth quarter earnings. Chevron, ConocoPhillips, Marathon Oil and Amerada Hess all delivered profit increases last week. Hess's earnings almost doubled, and Marathon's almost tripled. Oil companies also made big profits from their refining activities. The average US profit on refining crude oil into petrol and other fuels widened to a record of almost $11 a barrel.

Exxon Mobil's annual sales are worth more than the gross domestic products of countries such as Sweden, Taiwan and Indonesia and its cash reserve is more than enough to cover the entire foreign debt of the Philippines.

BP, the UK oil giant, earlier this month said it would take a $400m charge for fire damage at its Texas City refinery. But the company is still on track to announce annual profits of over $21bn next month - the biggest in British corporate history.